German drugmaker Merz Pharma Group has ended a plan to acquire Obagi Medical Products Inc. after a competitor raised its bid to buy the dermatology products maker.
Merz said Monday it is a "disciplined buyer," and it was withdrawing its $22-per-share cash bid for Obagi after Canadian drugmaker Valeant Pharmaceuticals raised its offer last week to $24 per share, or about $418.3 million for the company.
"Obagi was an opportunity worth pursing given its complementary fit with Merz's portfolio of injectables," Merz CEO Philip Burchard said in a statement. "However, Merz is a disciplined buyer and at this level the economics of such a transaction do not meet our requirements."
Merz makes drugs and other products to treat neurological and clinical dermatological conditions.
The Merz withdrawal ends a brief bidding competition for Obagi, which is based in Long Beach, Calif., and makes skin anesthetics as well as prescription and over-the-counter treatments for wrinkles, acne, sun damage and other skin problems.
Valeant initially said last month that it would pay $19.75 per share for Obagi's stock. Merz said on Tuesday that it would offer $22 per share.
Obagi then announced the next day that Valeant had boosted its offer.
In morning trading, Obagi Medical Products shares fell $1.51, or 5.9 percent, to $23.91. The stock closed Friday at $25.42, up 65 percent from its closing price of $15.39 the day before Valeant's original offer was publicized.